FRAMINGHAM, Mass. -- Security of supply and an adequate terminal network is still essential as the recent Colonial disruption demonstrated, but supply is plentiful today and there are more than 1,000 refined product terminals in the United States with more than 250 million barrels of storage and 300 million barrels of throughput capacity. So while a credible branded supplier must have multiple locations spread over a wide market area and the logistical and financial wherewithal to supply these locations, terminals alone cannot distinguish the efficacy of a branded supplier as integration to refineries once did.
Brand recognition and quality are important, but frankly, Wawa, BJ’s, Costco, Pilot and other chain retailers have as much or more fuel recognition and respect as any of the major brands, including stalwarts such as Exxon, Shell and Mobil.
Credit-card decks, once a major selling point, are completely forgotten; the real answer to “What’s in your wallet?” is everything but a gas card!
Advertising and promotion in fuel are also going the way of the blacksmith. Most buyers rightfully see no difference in fuel quality or performance. And we are well past the stage of encouraging usage among the driving public.
While price, location and ease of access are still critical to selling fuel, it is the retailer who controls location and site configuration. Most retailers understand price sells fuel, so to pay a significant premium (more than 2 cents per gallon) on branded fuel is counterproductive. Unless payment terms, credit and other factors are part of the package, there is no reason to “fly the flag.”
The Differentiators
Other factors will continue to distinguish great branded suppliers from the “also-rans.” They include:
- Internet fixed-priced fuel sales
- Assistance in getting government subsidies and capital for site improvement to sell alternative fuels such as hydrogen and natural gas
- Affinity programs for carbon mitigation and green fuel sales
- Fleet marketing
- Affinity programs that take a small fee per gallon for social programs or discounts to the consumer
- Social-media programs and high-tech “find-and-direct” programs for traffic diversion to sites at specific time slots.
The ultimate function of a branded supplier was always to help retailers sell more fuel and capture market share. Nothing has really changed except the technology, tools and customer response.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.